District Court Ruling Jeopardizes Nevada ‘Early Start’ Cannabis Plans

Carson City, Nevada District Judge James Wilson has issued a temporary injunction barring the state from issuing recreational cannabis licenses to existing medical dispensaries, ruling that the ballot measure approved by voters dictates that licensed alcohol distributors have the exclusive rights to distribute cannabis for 18 months, the Associated Press reports. Wilson said in his ruling that the distribution regulations adopted as part of the Tax Commission’s Early Start ran afoul of the law.

The decision puts the planned July 1 start date in jeopardy.

In the 11-page ruling, Wilson said the Tax Commission engaged in “ad-hoc” rulemaking outside the legal process when they opened up distribution licensing applications to non-members of the Independent Alcohol Distributors of Nevada. The commission made the decision after claiming that there wasn’t enough interest from alcohol companies to meet the demands of the cannabis market.

“The department has not determined whether exclusively licensing liquor wholesalers as temporary marijuana distributors will result in an insufficient number of licenses,” Wilson wrote.

In all, 80 applicants from the state’s existing cannabis industry had applied for distribution licenses compared to just five liquor wholesalers – and none of those met the legal requirements to distribute cannabis.

Nevertheless, Department of Taxation Spokeswoman Stephanie Klapstein said the agency is still hopeful legal sales could commence on July 1 but did not offer a definitive plan.

“We hope for a quick response from those who are seeking exclusivity in marijuana distribution,” she said.

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